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As the clock counts down to the vote on the withdrawal agreement in the UK parliament on Tuesday, there is no sign that the prime minister is building a majority. In actual fact the debate at this stage is on what size of a defeat will be inflicted on the government in rejecting the withdrawal agreement.
Farmers will be worst hit
The problem for farmers on the island of Ireland is that while there may be a majority opposed to the withdrawal agreement, the opposition is for different reasons. The problem with rejecting the agreement is that there is no consensus on how to proceed and the UK is due to leave the EU in 110 days from now. Without a deal there is unimaginable chaos in trade with the UK with agricultural produce being particularly hit because of huge WTO tariffs.
There are reports that the UK won't impose WTO tariffs but adopt a zero tariff strategy on everything if this eventuality arises. That presents a different crisis for Irish farming because under most favoured nation rules with the WTO, if a country grants a preferential tariff, it must be to every member. That means South American beef where the current farm gate price is just over €2/kg arrives unrestricted and Irish beef becomes displaced and value collapses. Chaos would also ensue in sheep meat with the flood gates opened there as well. Pig meat and dairy trade are at world market prices so while there would be disruption and added competition, the crisis wouldn't be just as great.
No consensus on alternative
The chaos of no deal is so unimaginable that perhaps that is the greatest chance of it somehow being avoided. The decision from the EU court on the UK’s right to unilaterally withdraw its article 50 notification to leave will be announced tomorrow and it is expected to follow last week's opinion. It said that the UK alone could decide to change its mind and approval of the other member states wouldn't be necessary.
What is very clear is that there are very few campaigners for a no deal Brexit at this point. Even pro Brexit advocates such as the DUP are saying that the prime minister should go back to Brussels and get a better deal. The backstop is the sticking point and while it is politically sensitive, it is the mechanism that locks the UK to customs alignment with the rest of the EU. Irish farmers and exporters to Britain have as little interest in the Irish backstop being enforced as the most committed unionist has.
Renegotiation unlikely
The trouble in going back to Brussels is that there is nothing left to talk about other than a reversal of EU policy. Given the unanimity to date of the EU 27 under the negotiation of Michel Barnier, it is difficult to see where the room for manoeuvre is. The other option that is being increasingly flogged by pro Brexit advocates is moving to a Norway plus position with the EU. This means leaving the EU as a member but remaining part of the single market and adding customs alignment.
From an Irish trade perspective that would be next best to having the UK remain as a member, but that would take a serious amount of negotiation and there are rumblings of discontent among the existing European Economic Area (EEA) members about the UK joining. One “threat” the prime minister has been using in trying to cajole MPs to support her is that without her withdrawal agreement being accepted, there is a chance of no Brexit at all. We wish.
Crisis planning essential
Political chaos in the UK after Tuesday’s vote in parliament seems inevitable unless miraculously enough MPs are persuaded to support the withdrawal agreement in the next 24 hours. The risk of chaos for Irish farmers then becomes ever more likely and both the government and the EU need to have every market support tool in their kit ready to spring into operation. No deal will present huge problems for Ireland, broadly similar to what it would do for the UK, but the problems will be greatest of all for farmers and the agri food industry.
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